History of Greed: Financial Fraud from Tulip Mania to Bernie Madoff

by David E. Y. Sarna, Andrew Malik (Foreword)

From the earliest financial scams of the seventeenth century, through the headline-grabbing Wall Street scandals of our times, History of Greed provides a comprehensive history of financial fraud. In it, David E. Y. Sarna exposes the true and often riveting stories of how both naïve and sophisticated investors alike were fooled by unscrupulous entrepreneurs, lawyers, hedge fund managers, CPAs, Texas billionaires, political fundraisers, music managers, financial advisers, and even former Mossad agents. From the people behind the financial fraud and how they did it to why people continually fall prey to scam artists, Sarna outlines what actions you can take today to protect yourself from becoming the victim of tomorrow's "too good to be true" investment opportunity. History of Greed details how markets are manipulated, books are cooked, Ponzi schemes are hatched, and how the government only closes the barn door once the cows have all escaped.

Praise for HISTORY OF GREED

"David Sarna is a visionary technologist. He is also a sophisticated investor and financier. He has written a readable, comprehensive, fascinating, and well-researched book that explores troublesome aspects of the financial system in a way only an experienced insider could."

—Jay N. Goldberg, Senior Managing Director, Hudson Ventures

"A comprehensive review of what has happened to us in our financial markets over and over and over and over again. It's an important history, written with wit and delivered with wisdom. Undoubtedly, History of Greed will become required reading for anyone serious about understanding the capital markets."

—Frederick L. Gorsetman, Founder and Managing Member, Oxbridge Financial Group, LLC

400 years of financial fraud in the making

Genres: History, Economics, Finance, Crime, Business, Nonfiction, Audiobook

416 pages, Hardcover

First published July 30, 2010

Reviews

[John · Rating 2 out of 5]

Too many quotes and excessive detail. I did learn about many forms of fraud and insider trading and such. Maybe it could have been written better but given the subject matter that would be asking for a lot. It was hard to enjoy this book.

The title is also misleading. This is not a history of greed but a collection of financial fraud stories with Mr. Sarna explaining how they work.

[Abram Martin · Rating 3 out of 5]

I'm sure this book would be interesting to some people, but for me, it was a slog. He did explain how the stock market works and dedicates a couple of chapters to the Madoff ponzi scheme.

[Ietrio · Rating 1 out of 5]

Sound pretty much like an article churner trying to write a book from trivia and misinformation, as the Tulip Mania wasn't what people suppose it was, and Madoff was about a promise too good to be true in a world where governments pump out from 30 to 80% of the wealth generated.

[Anastasia · Rating 3 out of 5]

Insightful, if neither cohesive nor entertaining, and a fitting companion to the less technical Kleptopia: How Dirty Money is Conquering the World. Great cover - I adore toting this one around on the subway.

[Erwin · Rating 1 out of 5]

Don't waste your time. This is not a well presented case and seems more a slapdash collection of stories pulled from the media without much original research and without a coherent thesis. Poorly constructed and poorly written book.

[Andrea James · Rating 2 out of 5]

Meh. I gave up about two-thirds of the way. It just seems like a collection of newspaper articles rather than a coherent weaving of the history.

[Isaac Gill · Rating 5 out of 5]

Phenomenal book. Great content. The author does a great job making (mostly) arcane financial matters entertaining and engaging.

[Gil Bradshaw · Rating 4 out of 5]

This book contains a history of securities fraud techniques. The reason it is better than reading legal cases and opinions is because the legal cases and opinions often don't elaborate on the factual scenarios at hand. Sarna does elaborate on the factual circumstances of the cases he chooses to discuss.

The interesting thing is that many of the scams discussed in the book perform their transaction 90% correct but then the fraud happens in the final iteration. That means that as a deal architect like me, I am able to see through this book, a bunch of deals broken down and explained and Sarna will discuss where they deviated from the legal path.

This is by no means an introduction to securities markets. I'm surprised that he doesn't explain concepts like a transfer agent, restricted securities, CUSIP numbers, and other concepts that frankly, only the industry experts are going to understand. Thus, it seems like this book has a very limited audience of people who will not be confused by the intricacies of the scam.

I hope this book is successful because I really love this genre of books.

I believe I will read this book a few times to fully appreciate it.

UPDATE, the first few chapters were much more dense. The second half of the book is a super-easy read and changes dramatically from the first part. The second part of the book examines a few frauds, like Madoff, Dreier, Sir Allen Stanford, and other massive schemes and goes very much in-depth. The first section was incredible and worth re-reading, but the rest of the book was reminiscent of other financial fraud books that I have already read.

This book is very long. I started it three months ago and have read several books in between it.

[Ob-jonny · Rating 3 out of 5]

This is an informative yet entertaining history of financial fraud from ancient times up through the Madoff scandal and the misbehavior of financial institutions like Goldman Sachs. It's funny that fraud began to occur almost immediately after the first corporations began to exist in the 1600s and 1700s. These early schemes were especially interesting because they are never discussed anywhere else and it shows how different things were a long time ago when regulations were non-existent and people more trusting and naive. The story of the first ponzi scheme in the early 1900s was equally interesting. The Madoff ponzi scheme is discussed in detail and it allows you to see how those things really happen. Madoff had been chairman at the NASDAQ and had an impeccable resume and knew all the right people. The returns from his fund were good but not especially good which made it very plausible and allowed it to slip under the radar. However, there were tipoffs that should have signaled an alarm like when the fund's returns were consistent even during large scale crashes which hurt every other type of fund. His fund never made an actual trade and the entire time they knew it would be a complete disaster eventually. It's an interesting look into human psychology that someone could have gone about his life with this horrible dread hanging in the background that could never be fixed.

[Davina · Rating 4 out of 5]

I would dispute the title as a "History of Greed" as it seems to have a bit of history and a lot of focus on mostly recent events. I also challenge the authors call for better enforcement of current laws as needing a lot more behind it. It always seems a cop out to give advice for better enforcement alone. He does offer some advice about staffing, pay, and education of the regulatory agencies, and I'm very glad to hear him speak in favor of transparency in markets, and for the necessity of regulators to insure the accuracy of the information. Overall, lots of interesting stories and details. Done from an insiders perspective, in many ways, which added to the interest and enjoyment. Glad I've read this one.

[Jeffrey · Rating 3 out of 5]

about 2/3rds through I've decided that the book needed better focus. It's not nearly as bad as many of the review suggest, and I may go back and finish it at some point. But, a history of the Madoff scandal would have been better, using the historical context of other frauds. Or else a true history of financial shenanigans with more thought put into how to describe those complex schemes to laymen.

Also using various web-based resources throughout the text leads to problems as the web changes.

[Aloke · Rating 3 out of 5]

History of Greed narrates the financial scams and tries to understand the human tendencies and the reasoning along with the legal framework. This book is an easy read for a complicated topic like financial scams. This book is equally appealing for readers with no particular interest to financial market. It tries to understand the nature of human being and his tendencies to gain money at any cost.

[KitCat · Rating 3 out of 5]

I downloaded this as an audiobook. I enjoyed listening to many of the anecdotes from the book. I shall continue to be amazed by how easily people slip down a slope of greed with just little decisions and a need to follow the pack.

[Joel Arnold · Rating 3 out of 5]

Challenging in that it is rather technical at times. On the other hand, it was interesting and increased my knowledge in many areas by pushing me beyond what I was already familiar with. The most interesting thing about this book is its breadth in the number of frauds it discusses.

[Purba Yudha · Rating 3 out of 5]

A good book for who want to know about many form of fraud and insider trading in financial market (financial crime), but it was hard to enjoy this book

[Walter Herrick · Rating 4 out of 5]

Pretty good. a little hard to follow at times because I was unfamiliar with a few concepts, but interesting.

[Rizvan Jaldeen · Rating 4 out of 5]

Interesting read